JP Morgan: Media Buyers Expect Ad Spend To Rise At Least 5 Percent In H209


Credit: Flickr / Dave Chen

While the 5.3 percent decline in online ad spend recorded by the Interactive Advertising Bureau this week served as an unnecessary reminder of how bad things were in the first six months of the year, a survey of media buyers by JP Morgan analyst Imran Khan offers some hope for right now.

in a poll of 20 media buyers who manage annual advertising budgets of $1.6 billion — or an average of $81 million per participant — 45 percent believe ad spend in the latter six months of ’09 will be up between 5- and 9 percent from h109 levels; an additional 15 percent are even more optimistic, expecting an upside of 10- to 14 percent over the first half of the year. Just 10 percent anticipate the ad spend situation to worsen by the end of the year. But the lag in spending from January to June has done its damage for this year, as 40 percent of the buyers surveyed are projecting overall 2009 expenditures to be flat compared to 2008.

The really bad news this year is in the area of pricing. Media buyers, perhaps reflecting their natural biases, overwhelmingly say they will pay less for nearly every ad category. For example, for search advertising, 65 percent say they will pay less in 2009 than 2008, while 80 percent say display prices will be down this year as well. About 35 percent said they would pay higher prices this year for search ads and for cable TV versus ’08 — the highest percentages of any other segment.

As for 2010, media buyers are sharply divided about how much a recovery the ad industry will see. About 40 percent expect spending will continue to be flat in 2010, while 50 percent say it’ll be up greater than 5 percent.

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